Pricing for Profit series #5: Pricing Due Diligence

  • 23 Aug 2022

Why would you invest in a company without understanding the financial potential from developing its' pricing strategy? It is important to ensure that your investments have real potential regarding operational development and maturity that allows you to capitalize on that opportunity. That's where Pricing Due Diligence comes in! 

At PriceGain, we often see that Private Equity firms invest in companies without analyzing the financial potential regarding pricing. Pricing is an important factor for investors to look into as it affects the KPIs most relevant to them, such as internal rate of return, cash generation and growth.

Pricing Due Diligence (PDD) reveals a company’s profit potential by mapping out the gap between the current pricing strategy and the possibilities. By utilizing PriceGain’s PDD, you will be able to identify this potential, in prospects and current holdings. Since a company’s value is often calculated by multiplying its EBITDA with a multiple for the expected future return, an improved pricing strategy will increase the value significantly.

With recent valuations being volatile, uncertain, and decreasing, it is of utmost importance to ensure that your investments have real potential regarding operational development. Through our Pricing Due Diligence, we help you understand the financial potential of your investments so that you can achieve profitability and sustainable growth! Get in contact with us!